Macro Outlook for Next Week: Non-farm Payrolls, Powell, Trump Compete for Attention, Bets on Fed Rate Cut Increase

On March 1st, after the U.S. inflation data met expectations on Friday, the dollar held near a two-week high. The dispute between Trump and Zelensky also boosted the safe-haven appeal of the dollar. U.S. Treasuries had their strongest start to a year since the COVID-19 crisis began in early 2020, with January's nearly 4.8% yield on ten-year U.S. bonds now close to 4.2%, and two-year bond yields breaking below 4% during trading for the first time in four months. U.S stocks almost wiped out their gains from 2025 but rebounded sharply on Friday, narrowing losses for a second consecutive week.

Here are key points that markets will focus on in this new week:

Monday at 22:45 - Final value of S&P Global Manufacturing PMI for February

Monday at 23:00 - ISM Manufacturing PMI for February and Construction Spending MoM for January 

Tuesday at 21:50 - Speech by FOMC voter and St Louis Fed President Musalem from year of 2025

Wednesday at3:20 - Speech by permanent FOMC member & New York Fed President Williams at Bloomberg Investment Forum

Wednesday at21:15 – ADP Employment Change for February 

Wednesday at22:45 – Final value of S&P Global Services PMI for February 

Thursday at1:00 – Federal Reserve releases Beige Book Economic Report 

Thursdayat20:30– Challenger Job Cuts YoYforFebruary  

Thursdayat21:30– Initial Jobless Claims up until March1st  

Fridayat21:30– Nonfarm Payrolls (seasonally adjusted), Unemployment Rate, Average Hourly Earnings YoY & MoM allforFebruary   

Fridayat23 :45 – Panel discussion report by permanent FOMC member & New York Fed President Williams along with Fed Governor Bowman at a forum on U.S. monetary policy organized by the University of Chicago Booth School of Business

The non-farm employment data for February in the United States will be released on Friday, which could be a key indicator affecting the direction of U.S. interest rates. Economists estimate that the U.S. economy added 133,000 jobs in February, lower than January's 143,000; unemployment is expected to remain unchanged at 4%, while average hourly earnings are expected to increase by 0.3% month-on-month, lower than January's 0.5%. The January PCE report is the last inflation data that Federal Reserve officials will receive before their next policy meeting on March 18-19th.

After cutting interest rates by 100 basis points over three consecutive meetings at the end of 2024, it is almost certain that the Federal Reserve will keep interest rates steady for a second consecutive meeting this year.